Halliburton, Baker Hughes to Call Off Merger

Halliburton Co. and Baker Hughes Inc. are planning to call off their merger, once valued at nearly $35 billion, which encountered opposition on multiple continents from regulators who claimed that it would hurt competition in the oil-field services business.

The announcement of an end to the merger agreement could come as soon as Sunday evening, according to a person familiar with the matter.

The deal to combine the world's second- and third-largest oil-field services firms after Schlumberger Ltd. appeared increasingly troubled since April 6, when the Justice Department filed a lawsuit to block it. The merger had also encountered opposition from regulators in Europe.

The companies had anticipated regulatory challenges when they originally struck their agreement in 2014, but repeatedly stressed that they felt the obstacles could be overcome, even as analysts and other experts questioned the risk.

The two sides previously set April 30 as the day when the agreement expired, allowing either to walk away from the deal. After Halliburton announced first-quarter operating results but postponed a discussion of its earnings until May 3, analysts speculated that the merger was in trouble.

Halliburton will have to pay a $3.5 billion break-up fee to Baker Hughes -- a condition of the merger agreement put in place in a nod to anticipated regulatory challenges.

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(END) Dow Jones Newswires

May 01, 2016 17:58 ET (21:58 GMT)

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